Google gets grilled

Senators actually sounded like they understood digital advertising!

In 2018, the Senate Intelligence Committee summoned top executives from Google, Facebook and Twitter to ask them about their role in the 2016 election and what they were planning on doing for the 2018 mid-term election. 

At the time, I spoke with Senator Mark Warner (D-VA) about his thoughts on the hearing, and one question I asked:

So then why not have some of these SSPs [supply-side platforms] and DSPs sit alongside Facebook and Google?

I think that’s a very fair question. My hope is that that will be kind of the next wave. And when we had the hearing back on Aug. 1, [Graphika CEO] John Kelly was saying—and it never got as much attention as I thought, but it was like to me, holy heck—the volume of traffic on the far left and far right in this country, that it’s 25- to 30-to-one bots or foreign entities (not all the bots are created by foreign entities but bots or foreign fake accounts) over actual Americans.

And that’s stunning because if that much additional traffic is created by not Americans, that would mean that many of these stories that may be appearing on your news feed are not because that many Americans actually clicked on them, but [because] somebody is manipulating the system. And that goes into all of the questions about digital advertising and the manipulation in digital advertising. I know there’s been some discussions there, but I think it’s hugely problematic as well.

Here we are, two years later, and now Google ( more accurately, its mergers and acquisitions chief Donald Harrison) is sitting in front of the Senate Judiciary subcommittee on antitrust, a month after the House’s hearing, getting taken to the shed over its dominating role in the digital ad ecosystem.

AdExchanger has a great rundown of Google getting grilled.

Congress has come a long way from when Sen. Orrin Hatch (R-UT) asked Mark Zuckerberg: “How do you sustain a business model in which users don’t pay for your service?”

To which the CEO of the world’s largest media company responded: “Senator, we run ads.” Followed by a now-famous Cheshire grin.

Such pleasantries were not noticeable in yesterday’s hearing. In fact, Sen. Josh Hawley (R-MO) laid out in 42 seconds the government’s case against Google’s monopolistic model:

“I think the concern is that you control YouTube and search, which are the dominant platforms; you control massive amounts of consumer data, that you have harvested from your other consumer-facing platforms -- Gmail, Google Maps, GSuite, etc -- you then use those advantages in the ad stack at every single layer, every layer of which you exercise dominance in. This looks like monopoly upon monopoly in a classic case. of time, we’ll see. We'll find out, I hope, as these antitrust investigations proceed. But these appearances are very troubling.”

Jason Kint @jason_kint

Watch Google’s business model harms get filleted by @HawleyMO in three parts. (1 of 3) “Wouldn’t you be using your dominant position in YouTube and in search in order to incentive and indeed monopolize the demand side ad market?”

Whenever I write about Google’s position, I like to highlight Beeswax’s Ari Parparo’s graphic of its display stack:

Ari Paparo @aripap

When talking about a Google/DoubleClick break-up, the ways the products come together can be extremely confusing. I created a diagram explaining the Google display advertising stack (with footnotes!):

One curious thread from the hearing yesterday: Google’s role in content moderation. Perhaps not surprising, given the Republican talking point. As The Washington Post reports:

Sen. Mike Lee (R-Utah), the subcommittee’s chairman, opened the hearing Tuesday by saying he would continue to pursue issues of perceived bias against conservatives but that the hearing was not fundamentally about those concerns. But in his first question to Google, he asked about its alleged censorship of a conservative news outlet.

“I want to be clear here that a private company engaging in censorship on its own platform is not a violation of antitrust laws,” Lee said. “Nevertheless, as I pointed out in my letter to your company on this subject, isn’t this behavior evidence of market power? In other words, why would any company want to treat its customers like that? Unless it was confident that its customers had no viable alternative.”

So where does this go from here? Let’s look to that other “opoly” of the digital duopoly: Facebook. 

Yesterday evening, the Wall Street Journal reported that:

The Federal Trade Commission is gearing up to file a possible antitrust lawsuit against Facebook Inc by year-end, according to people familiar with the matter, in a case that would challenge the company’s dominant position in social media.

The case preparations come after the FTC has spent more than a year investigating concerns that Facebook has been using its powerful market position to stifle competition, part of a broader effort by U.S. antitrust authorities to examine the conduct of a handful of dominant tech companies.

The thing that will be interesting to follow: what happens should a) Joe Biden win; and/or b) the Senate flips to Democratic control? Will Congress continue to go down the antitrust path, or will it close up shop? 

But at the very least, it’s nice to know that Senators are asking better questions of tech companies. 

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Mason Jennings, “Ballad of Paul and Sheila”

Some interesting links:

For the ashamed educator: 

• Nearly two-thirds of US young adults unaware 6m Jews killed in the Holocaust (The Guardian)

• The Bombings of America That We Forgot (Time)

For platform responsibility:

• Pro-Trump youth group enlists teens in secretive campaign likened to a ‘troll farm,’ prompting rebuke by Facebook and Twitter (WaPo)

For media lawyers:

• Alan Dershowitz Sues CNN for $300 Million Over Impeachment Defense (Variety)

For the future:

• AT&T CEO Sees Less Hope That 5G iPhone Will Fuel Upgrade Frenzy (Bloomberg)

• How the future of TV and streaming has – and hasn’t – been reshaped so far by 2020 (Digiday)

For media companies that have grifter-CEOs who are also megalomaniacal micromanagers:

• The Daily Wire To Move Headquarters From Los Angeles To Nashville (Deadline)

For political advertisers:

• YouTube 2020: Why politics have exploded on the video platform (NBC News)

• Massive political spending to offset 2020 ad losses, Magna forecast (Ad Age)